Law 19/2012 of 8 May, as amended (in force as of 8 July 2012) is the main piece of legislation applicable to Portuguese merger control. Mergers having an impact in Portugal and meeting the relevant thresholds may be subject to Council Regulation (EC) 139/2004 of 20 January 2004 (the "EU Merger Regulation") and to the exclusive jurisdiction of the European Commission. 

Merger control in Portugal is also governed by the rules contained in the statutes of the Autoridade da Concorrência (the Portuguese Competition Authority, or PCA) (Decree-Law 125/2014, of 18 August, as amended); Regulation 993/2021 of 2 December, which enacts the rules regarding notification forms (regular and simplified forms, respectively in Annexes I.A and I.B of the regulation); and Regulation 1/E/2003 of the PCA of 25 January 2013, which determines the PCS'a fees for the review procedure.

The PCA has issued several pieces of relevant guidance (soft law) on merger control, namely:

• the Guidelines for the economic appraisal of horizontal mergers of December 2016;
• the pre-notification Guidelines, of 27 December 2012, regarding pre-notification contacts with the PCA;
• the Guidelines on Remedies of 28 July 2011;
• the guidance on the simplified procedure of 24 July 2007; and
• the Guidelines on the method of setting fines, of 20 December 2012.

More recently, on 27 December, 2022, the PCA adopted its Best Practices Guide on Gun-Jumping.

On a subsidiary basis, the following legislation is also applicable:

• the Administrative Procedure Code (approved by Decree-Law 54/2015, of 7 January) – applicable to merger control procedures conducted by the PCA;
• the rules of the Administrative Court Procedure Code (approved by Law 15/2002, of 22 February) – applicable, inter alia, to the judicial review of the PCA's decision adopted during review proceedings; and
• the Misdemeanours Act (approved by Decree-Law 433/82, of 27 October) – applicable to procedures involving the application of penalties and their judicial review.

As a general observation, the PCA tends to follow the Commission's decisional practice and the approach stated in its guidelines on merger control closely.

Decree-Law 138/2014, of 15 September 2014, establishes the legal regime for safeguarding strategic assets deemed essential to guarantee national defence and security in providing essential services in the energy, transport, and communication sectors.

Article 3 of this decree-law provides that the government may oppose the acquisition of direct or indirect control over a strategic asset by a person or company of a third country to the EU or the EEA if the acquisition poses a "sufficiently real and serious threat" to national security/defence or the security of the supply of strategic services. Article 3 further specifies the relevant criteria that should be applied in determining what constitutes "a real and serious threat" (eg, the physical security of strategic assets) and the situations where this threat may effectively arise (eg, a connection between the acquirer and countries that do not recognise or respect the basic principles of a democratic state).

Article 4 establishes the review and opposition procedure. According to Article 5, acquirers of strategic assets covered by the law may request the government to confirm its non-opposition to the transaction. Confirmation is tacitly given if the government initiates no investigation within 30 working days.

Competition law in Portugal is enforced by the PCA (created in 2003 by Decree-Law 10/2003 of 18 January). The PCA enjoys substantial independence regarding the government and other state bodies and has financial autonomy. The PCA's regulatory powers span all sectors of the economy, including regulated sectors. A summary of the PCA's decisions on merger control is available at www.concorrencia.pt.

Under the Competition Act, the PCA has exclusive competence to assess and decide on concentrations, subject to mandatory prior notification. However, concentrations in markets subject to sectoral regulation (such as telecommunications, energy, transport, postal services, banking and financial services, insurance, water and waste, and health and media) are also subject to sector-specific legislation, which may involve additional assessment by the relevant regulatory authorities. In either phase of the procedure (see 3.8 Review Process), the PCA must request an opinion from the sectoral regulator.

With the exception of negative opinions (eg, blocking the transaction) issued by the Entidade Reguladora para a Comunicação Social (the media regulator), all other opinions (either negative or positive) issued by other regulators (as well as positive opinions from the media regulator) are non-binding.

Media

The media sector regulator must be notified of, and approve, acquisitions of shareholdings in companies active in the media sector meeting the relevant legal criteria (see Article 3 of Law 78/2015 of 29 July 2015). In the specific case of the media sector, the law sets forth the possibility for the regulator to block the operation if it is deemed to pose a threat to the freedom of speech or the plurality of the media (see, for example, the decision adopted in case 41/2009, Ongoing/Prisa/Media Capital, where the PCA prohibited the merger following the negative binding opinion of the regulator, even though it raised no competition concerns). Consultation with the media regulator suspends the deadline for the PCA to adopt a final decision. Mergers in other specific sectors must also be notified to and approved by the competent regulatory authorities.

Banking

The direct or indirect acquisition or strengthening of a qualified shareholding in a foreign credit institution or in credit institutions that represent 10% or more of the shareholding of the target or 2% of the shareholding of the acquirer must be notified to and approved by the Portuguese Central Bank, Banco de Portugal (see Article 43-A of Decree-Law 298/92, of 31 December 1992). The securities regulator, Comissão do Mercado dos Valores Mobiliários, must be notified of any operations concerning the acquisition of a qualified majority in a publicly listed company (see Article 16 of Decree-Law 486/99, of 13 November 1999). The assessment is prudential in both cases, not based on competition considerations.

Insurance

The direct or indirect acquisition or strengthening of a qualified shareholding (20%, a third or 50%) in an insurance company must be notified to the Autoridade de Supervisão de Seguros e Fundos de Pensões (see Article 162 of Law 147/2015, of 9 September 2015), which may oppose the operation if it considers that the acquirer is not in a position to guarantee the prudent management of the target company (see Article 163 of Law 147/2015, of 9 September 2015).

In addition, pursuant to an extraordinary appeal, a concentration that the PCA prohibits may still be approved by the Council of Ministers under the proposal of the minister of the economy if the parties are able to demonstrate that the interests pursued by the merger in question are of fundamental strategic economic importance to the national economy and outweigh the competition restrictions generated in the relevant affected markets (see Article 41 of Decree-Law 125/2014, of 18 August 2014, as amended).

Notification is compulsory. Concentrations that meet the jurisdictional thresholds are subject to mandatory filing and must not be implemented before:

• the issuance of a non-opposition decision;
• the issuance of a decision of clearance subject to conditions; or
• obtaining a tacit clearance decision (see 3.8 Review Process).

The following operations are excluded:

• the acquisition of shareholdings or assets by an insolvency administrator within insolvency legal proceedings;
• the acquisition of shareholdings merely to serve as collateral;
• the temporary acquisition by financial institutions or insurance companies of securities that they have acquired in an undertaking to resell them; and
• the acquisition by the Portuguese state of a controlling shareholding in a credit institution or the transfer of its business to a transition bank as ordered by Banco de Portugal in situations of bank recapitalisation and resolution falling within the scope of Law 63-A/2008 of 24 November 2008, as amended (see Article 20 (1)), and Decree-Law 298/92, of 31 December, as amended.

Regarding the third bullet point, this is provided that they do not exercise voting rights in respect of those securities to determine the competitive behaviour of that undertaking or provided that they exercise such voting rights only intending to prepare the disposal of all or part of that undertaking or its assets, or the disposal of those securities and that any such disposal takes place within one year of the date of acquisition.

Consequences of Not Filing a Concentration Subject to Mandatory Notification

Not filing a concentration subject to mandatory notification has serious negative consequences.

Lack of production of legal effects or nullity and voidness

The legal consequences for the transaction's validity depend on whether the concentration is implemented before a clearance decision is adopted (regardless of whether it has been notified to the PCA) or whether the parties implemented the concentration in breach of a prohibition decision. A concentration implemented before a clearance decision is adopted produces no legal effects. A concentration implemented in breach of a prohibition decision by the PCA is null and void and may be declared as such by a court. The PCA may also revoke a concentration that has been implemented in disregard of a decision of non-opposition imposing commitments.

The imposition of fines

If a concentration is subject to mandatory filing without clearance from the PCA or in breach of a prohibition decision, the PCA may impose fines on the undertakings concerned, reaching up to 10% of the previous year's turnover for each of the participating undertakings, calculated in accordance with the Competition Act and the PCA's guidelines on the method of setting fines.

So far, there have been no infringement procedures or fines applied, as in relation to foreign-to-foreign transactions, but at the national level, there has been a significant increase in ex officio investigations for the breach of the Competition Act. In 2021, the PCA applied fines totalling EUR395,000 in 3 gun-jumping cases and, in a 2022 case, a fine of EUR2,500,000. The PCA may initiate such proceedings for infringements that took place within the previous five years.

Personal liability of board members, directors, and managers

According to the Competition Act, persons holding positions in the managing bodies or heading up or being responsible for the supervision of the relevant department may also be held liable, with fines of up to 10% of their annual income (if evidenced that they knew, or should have known, about the infringement).

Private enforcement

Jumping the gun may give rise to actions for damages in cases where parties suffer harm caused to them by the early and unlawful implementation of a merger.

Ex officio investigations

In a situation where the PCA becomes aware of a concentration subject to mandatory notification being implemented within the previous five years in breach of the Competition Act, it can initiate ex officio proceedings and order the parties to notify (it does this often). In this case, the filing fees will be double the amount originally due. The PCA may also apply a periodic penalty payment of up to a maximum of 5% of the average turnover in the preceding year until the notification is filed. Ex officio investigations may also be opened if the PCA concludes that the clearance decision was issued based on false or incorrect information provided by the parties or when the parties disregard conditions or obligations imposed by the PCA.

Reputational effects

The consequences listed in any of the above bullet points can create negative reputational effects for the parties.

Penalties

Penalties imposed on undertakings are published on the PCA's website and are usually contained in press releases issued by the PCA. When the seriousness of the infringement and the fault of the party concerned so justifies, the PCA is allowed to publish an extract of the decision imposing a sanction or, at least, that part of the decision relating specifically to the sanction handed down in a case in the Official Journal of the Portuguese Republic and a national, regional or local newspaper with a large circulation, according to the relevant geographical market, at the expense of the party concerned.

On 26 June 2014, the PCA considered that the National Pharmacy Association (NPA), Farminveste 3 and Farminveste failed to notify the acquisition of control of ParaRede/Glintt. The concentration was later approved (Ccent. 47/2009 – Farminveste/ParaRede), but failure to notify led to fines of EUR158,837 – the first time the PCA had taken such a step.

On 27 December 2017, the PCA imposed fines of EUR38,500 on two firms for failing to notify a concentration in the dental care clinic market. The infringement proceedings originated from the notifying party, as the latter notified the transaction only after implementing the transaction (Ccent. 38/2015 – Vallis Sustainable/32 Senses), cleared by the PCA in Phase I. The undertakings applied for a settlement procedure during the review proceedings, whereby they acknowledged the facts and accepted their respective liabilities.

On 17 September 2019, the PCA sent a statement of objections to HCapital, SCA – SICAR, for acquiring sole control of Solzaima without prior notification of the transaction and, consequently, without obtaining clearance from the antitrust entity.

On 19 March 2020, the PCA imposed a fine of EUR155,000 on Hospital Particular do Algarve for gun jumping, finding that it had acquired sole control of Hospital de São Gonçalo de Lagos without the PCA’s prior approval. This case was the first involving failure to notify by the market share threshold.

On 22 September 2020, the PCA sent a statement of objections to Fidelidade SGOII for a failure to notify the acquisition of sole control of Fundo de Investimento Imobiliário Fechado Saudeinveste (Fundo Saudeinveste) and, therefore, without obtaining prior clearance from the antitrust enforcer. On 19 August 2021, the PCA imposed a fine of EUR300,000 on Fidelidade SGOIC for gun-jumping.

On 6 September 2022, the PCA sanctioned Santa Casa da Misericórdia with a fine amounting to a total of EUR2,500,000 for gun-jumping, in particular, for implementing the merger (specifically the acquisition of CVP – Sociedade de Gestão Hospitalar, S.A.) (14 December 2020) before the notification to the PCA (28 May 2021). 

The Competition Act applies to concentrations between undertakings that meet the relevant jurisdictional thresholds. According to the Competition Act, a concentration is deemed to exist when a change of control (in whole or in part) of one or more undertakings occurs on a lasting basis as a result of:

• a merger between two or more previously independent undertakings or parts of undertakings;
• the acquisition, directly or indirectly, of control of all or parts of the share capital or parts of the assets of one or various undertakings (to which a market turnover can be attributed), by one or more persons or undertakings already controlling at least one undertaking; or
• the creation of a joint venture performing all the functions of an autonomous economic entity on a lasting basis (a full-function joint venture).

The Competition Act does not cover internal restructurings or reorganisations, provided they do not result in a change of control. With regard to operations not involving the transfer of shares or assets, the PCA tends to follow the Commission's approach stated in its jurisdictional notice.

The definition of "control" closely follows that of the EU Merger Regulation:

• control consists of the ability to exercise "decisive influence" over an undertaking;
• control can result from rights, contracts or any other means conferring decisive influence on the composition, voting or decisions of the organs of an undertaking;
• control may result from ownership or the right to use all or part of an undertaking’s assets;
• control can be exercised on a de jure or de facto basis;
• veto rights over the appointment of senior management or the determination of the budget typically confer the power to exercise decisive influence on the undertaking concerned; veto rights over a business plan will normally also do so; and
• veto rights over the company’s investment policy are also considered to confer control if the investments at stake constitute an essential strategic feature of the market in which the company is active.

The Competition Act recognises two categories of control: sole and joint. Acquisitions of minority shareholdings or other interests that do not result in a change of control fall outside the scope of the Competition Act.

Concentrations must be notified to the PCA if they meet one of the three alternative jurisdictional thresholds set out in the Competition Act:

• the parties' aggregate Portuguese turnover exceeds EUR100 million, and the individual Portuguese turnover of each of at least two parties exceeds EUR5 million;
• the acquisition, creation or reinforcement of a shareholding exceeding 50% in the national market (or in a substantial part of it) for a particular good or service; or
• the acquisition, creation or reinforcement of a national market shareholding exceeding 30% but lower than 50% in the Portuguese market or a substantial part of it if the Portuguese individual turnover of at least two undertakings exceeds EUR5 million.

In addition, two or more concentrations between the same natural or legal persons within a period of two years, even when individually considered as not being subject to prior notification, will be deemed to constitute a single concentration subject to prior notification if two or more of the concentrations assessed in conjunction satisfy the relevant jurisdictional thresholds.

The Competition Act provides no special jurisdictional thresholds applicable to particular sectors.

The rules of the Competition Act concerning the calculation of market share and turnover of the undertakings concerned closely follow the provisions on turnover calculation of the EU Merger Regulation.

Additional Guidance on the Turnover Threshold

The concept of turnover comprises the amounts derived from the sale of products and the provision of services to undertakings and consumers in Portugal in the normal course of business. In the case of services, the method of calculating turnover, in general, does not differ from that used in the case of products: the PCA takes into consideration the total amount of sales. However, calculating the amounts derived from the provision of services may be more complex, as this depends on the exact service provided and the underlying legal and economic arrangements in the sector in question.

Where one undertaking provides the entire service directly to the customer, the turnover of the undertaking concerned consists of the total amount of sales for the provision of that service in the last financial year. The turnover to be taken into account is "net" turnover, after the deduction of sales rebates, VAT and other taxes directly related to turnover and any internal turnover within a group of companies. For credit institutions, other financial institutions and insurance undertakings, specific rules identify the sources of income to be used instead of turnover.

Turnover in foreign currencies must be converted using the average rate for the relevant 12-month period, as determined by the European Central Bank (the PCA follows the approach taken by the Commission in its jurisdictional notice – see 3.8 Review Process).

Additional Guidance on the Market Share Threshold

To establish jurisdiction, the PCA will consider the market shares of the undertakings concerned in the relevant product market in Portugal, even if the geographical market is wider in scope. The transfer of an undertaking's position in a given market (eg, when the acquiring undertaking is not active in the same relevant market(s) as the acquired company) is considered by the PCA to amount to the "creation" of a market share for jurisdictional purposes.

Turnover comprises the group-wide revenues. To calculate the market share and the turnover for each undertaking concerned in a concentration, the turnover to be taken into account, cumulatively, is as follows:

• turnover of the undertaking concerned in the concentration;
• turnover of the undertaking in which it has, directly or indirectly:
1. a majority shareholding;
2. more than half of the voting rights;
3. the possibility of appointing more than half of the members of the board of directors or the supervisory board; and/or
4. the power to manage its businesses;
• turnover of the undertakings that have, in the undertaking concerned, in isolation or as a whole, the rights or powers detailed in the second bullet point;
• turnover of the undertakings in which any of the undertakings referred to in the third bullet point may have the rights or powers detailed in the second bullet point;
• turnover of the undertakings where various undertakings referred to above hold together, between themselves or with third-party undertakings, the rights and powers detailed in the second bullet point.

Where a concentration constitutes a merger, the undertakings concerned (and the turnover of which should be included in the calculation) are the merging entities. In cases of acquisition of control and joint ventures, it can be a complicated matter to determine which undertakings are concerned. The PCA follows the rules and criteria that the European Commission sets in its Consolidated Jurisdictional Notice on controlling concentrations between undertakings.

The Competition Act catches foreign transactions to the extent that they have, or may have, effects in the Portuguese territory. The Act may apply whenever both or one of the parties alone (eg, a merging party or a party to a joint venture) achieve direct or indirect sales in Portugal (even through an agent or distributor), even if neither of the undertakings concerned is established or has assets in Portugal. Foreign-to-foreign transactions must be notified if the jurisdictional thresholds are met.

As noted in 2.6 Calculations of Jurisdictional Thresholds, a substantive overlap is not required to trigger the obligation to notify: the mere transfer of an undertaking's position in a given market (eg, when the acquiring undertaking is not active in the same relevant market(s) as the acquired company) is considered by the PCA to amount to the "creation" of a market share for jurisdictional purposes. Merger rules will apply where the operation constitutes a concentration within the meaning of the Competition Act and meets one of the alternative jurisdictional thresholds. However, in the absence of overlap, a concentration might be deemed to not raise competition concerns and, as such, may benefit from the simplified procedure.

Joint ventures are subject to merger control whenever the joint undertaking is full-function (eg, when it performs all the functions of an autonomous economic entity on a lasting basis) and the thresholds set out in 2.5 Jurisdictional Thresholds are met. Non-full-function joint ventures may still be subject to the Competition Act and assessed as restrictive practices if they have, as their object or effect, the coordination of the competitive behaviour of independent undertakings.

Transactions are subject to merger review only to the extent they meet the jurisdictional thresholds. Non-full-function joint ventures may be subject to the Competition Act as per 2.9 Market Share Jurisdictional Threshold.

As noted in 2.2 Failure to Notify, ex officio proceedings relating to concentrations can be initiated whenever the PCA becomes aware of a concentration having been implemented in the preceding five years without prior notification having been given to the Competition Authority in breach of the provisions of the law. In theory, parties to a non-notified merger could still notify the transaction after the fifth year following completion, although this could create specific legal difficulties.

A concentration subject to mandatory notification must not be implemented prior to being notified to and authorised by the PCA (or before a specified lapse of time in the case of tacit clearance).

Parties implementing a concentration before the clearance is obtained, are exposed to the consequences referred to in 2.2 Failure to Notify.

Since 2014 the PCA has imposed fines for "gun jumping" in the cases mentioned in 2.2 Failure to Notify. The PCA has imposed no penalties for gun jumping in the case of foreign-to-foreign transactions. Penalties are usually made public.

There are two possible exceptions to the suspensive effect.

First, a public bid of acquisition or an exchange offer notified to the PCA can be implemented before clearance, provided that the acquiring party does not exercise the voting rights associated with the shareholding or exercises them merely with the aim of protecting the financial value of the investment on the basis of derogation previously granted by the PCA to that effect.

Second, before or after the filing of the notification, the notifying parties may submit a reasoned request to the PCA for a derogation from the suspensive effect. The PCA may waive the standstill period where the detriment to the notifying parties (and, where relevant, affected third parties) resulting from the standstill obligation exceeds the possible threats to competition resulting from the transaction. The notifying parties must demonstrate that the threat to the transaction caused by the suspension is real and substantial.

If deemed necessary, the PCA may condition the granting of the derogation based on certain conditions or obligations aimed at ensuring effective competition. A complaint can be lodged against the decision to accept or reject the request for a derogation, but no appeal is admissible. The PCA's approach is restrictive: the waiver is granted in exceptional circumstances only, eg, in cases of imminent bankruptcy (see, eg, cases 11/2010, Triton/Stabilus; 41/2018, KKR/Cabolink; 27/2019, Risus Value/Maló Clinic; and 58/2019, Core Equity/Varandas de Sousa).

Since the enactment of the current Portuguese Competition Act in 2012, the PCA has assessed 11 derogation requests, all of which were granted a positive reply.

The PCA may allow a derogation to the suspensive effect in the case of a failing firm, but, as noted, the notifying parties have to demonstrate that the threat to the transaction caused by the suspension is real and substantial and that no major competition issues exist.

See 2.14 Exceptions to Suspensive Effect. To date, the PCA has neither issued any guidance nor adopted any decisional practice on the possibility of carving out the local business or assets to allow for the completion of a global transaction. As it stands, the Competition Act does not set forth this possibility. As noted, the parties are nonetheless allowed to submit a reasoned request to the PCA for a waiver.

There is no notification deadline as long as the standstill obligation is respected. See 2.1 Notification, 2.12 Requirement for Clearance before Implementation and 2.14 Exceptions to Suspensive Effect.

Regarding the triggering event, notifications should be submitted to the PCA:

• after the parties have concluded a binding agreement;
• following the date of the preliminary announcement of a public offer of acquisition or exchange, or the date of the announcement of the acquisition of a controlling shareholding in an undertaking with shares listed on a regulated stock market; or
• in the case of a concentration resulting from a public procurement procedure, after the definitive tender selection and before the public contract is signed off.

Notifications can be made from the moment the parties are able to demonstrate a "serious intention" to conclude an agreement or, in the case of a public offer of acquisition or exchange, where they have publicly announced the intention to make such an offer, and if this agreement or the public offer at issue results in a concentration. A letter of intent or a memorandum of understanding will generally be sufficient to satisfy the "serious intention" requirement, but this needs to be assessed in light of the specific circumstances of each case.

Notifications only become effective upon the notifying parties' payment of the filing fee, as defined in Regulation 1/E/2003. In practice, the rule is that notifying parties must attach a copy of the receipt of payment to the notification form. The base fee is payable at the time of notification and amounts to:

• EUR7,500, where the combined turnover generated in Portugal is below or equal to EUR15.5 million;
• EUR15,000 where the combined turnover generated in Portugal is in excess of EUR1,5 million but below or equal to EUR3 million; or
• EUR25,000, where the combined turnover generated in Portugal is in excess of EUR3 million.

An additional filing fee, corresponding to 50% of the base fee, must be paid upon opening a Phase II investigation.

Filing fees double when the PCA initiates ex officio proceedings for one of the following reasons (see 2.2 Failure to Notify):

• in a situation where the PCA becomes aware of a concentration subject to mandatory notification being implemented within the previous five years in violation of the Competition Act;
• if the PCA concludes that the clearance decision was issued based on false or incorrect information provided by the parties; or
• when the parties disregard conditions or obligations imposed by the PCA at the time of the non-opposition decision.

Joint notification must be made by the merging parties in true merger cases and, in the case of joint control, by those parties acquiring control. In changes of joint control over an existing joint venture, existing controlling undertakings not part of the transaction are not required to intervene as notifying parties. In other cases, the undertaking acquiring control must notify.

Joint notifications must be submitted by a common representative empowered to act on behalf of the notifying parties.

Notifications must be submitted using a regular or a simplified form as set out in Regulation 993/2021. The regular form specifies the information notifying parties must provide when submitting a full-form notification. It requires extensive information on the parties, the transaction, and the relevant markets, as well as contact details for customers, competitors, trade associations and potential suppliers, whom the PCA will consult as part of its investigation.

The PCA may waive the requirement for certain information or documents, particularly in the context of pre-notification contacts. Straightforward transactions may be filed using the simplified form. The alternative simplified form may be used when notifying concentrations are unlikely to raise competition concerns.

Supporting Documentation

The notification must also include supporting documentation, such as copies of the agreements bringing about the concentration, relevant board meeting minutes, reports and accounts, and various analyses, reports, studies, surveys and comparable documents that assess or analyse the concentrations or the affected markets with respect to market shares, competitive conditions, etc. The complete notification and supporting documentation must be submitted to the PCA in hard copy and a digital copy that can be uploaded to the PCA's website.

The filing is submitted in Portuguese. Translations may be required when the supporting documentation is in a foreign language, particularly when the case handlers to which the case has been allocated are not comfortable with it. Attached documents drafted in English are usually accepted.

The PCA will reject an incomplete form and will prevent the notification from becoming effective. The notifying parties will be forced to provide the missing information for the review procedure to initiate and the clock to start ticking on the final decision. An incomplete notification can generally be avoided by engaging in pre-notification discussions to clarify the level of information required by the PCA.

Upon discovering omissions in the filing after formal notification (and depending on the nature and extent of the missing information), the PCA might offer the notifying parties an opportunity to urgently provide the missing information, thereby avoiding the filing being declared incomplete. Due to the time constraints in merger procedures, the time allowed for rectification is normally limited to one or two days maximum.

The provision of inaccurate or misleading information in the filing authorises the PCA to impose fines on the undertakings concerned, reaching up to 1% of the previous year's turnover for each of the participating undertakings, calculated in accordance with the Competition Act and the PCA's guidelines on the method for setting fines.

The situation may also lead to personal liability for board members, directors and managers: according to the Competition Act, persons holding positions in the managing bodies or being responsible for the supervision of the relevant department may also be held liable, with fines of up to 40 "counting units" (in 2021 one counting unit equates to EUR102, so 40 counting units equates to EUR4,080) if it is demonstrated that the infringement was, or should have been, to their knowledge.

Furthermore, if the concentration is authorised by the PCA on the basis of inaccurate or misleading information, the latter may order measures such as the separation of the undertakings or of any aggregated assets or the cessation of control (ie, the PCA will order the concentration to be reversed). To date, there is no relevant precedent to report.

The assessment of a concentration under the Competition Act may encompass two phases: Phases I and II. Following receipt of the formal notification form, subject to being satisfied that the notification is complete (the PCA has a seven-working-day period upon formal notification within which to decide on the completeness of the notification; if the notification is considered complete, the deadline for a Phase I decision is counted from the date of that formal notification), the PCA has an initial period of 30 working days (extendable if information requests are made) to undertake a formal investigation and determine whether the transaction will result in a significant impediment of effective competition (SIEC) in the relevant markets.

In simple and well-prepared cases, including ones where the PCA used the simplified procedure, the PCA will normally reach a decision in far less than 30 working days. The PCA's review in Phase I involves sending requests for information to the parties and third parties, including customers, suppliers and competitors. These are quite common and may be burdensome depending on the complexity of the transaction and the degree of information initially provided. The PCA may also hold meetings as part of the process.

Phase I

At the end of Phase I, the PCA will reach one or more of the following decisions: 

• a decision of no jurisdiction – the transaction does not fall within the Competition Act because it is not a concentration or because it does not reach the relevant jurisdictional thresholds;
• a decision of referral – the PCA may refer the transaction to the European Commission under Article 22 of the EU Merger Regulation (this is normally the case when the PCA concludes that the transaction can potentially and significantly affect trade between member states; such a request shall be made at most within 15 working days of the date on which the concentration was notified to the PCA);
• a decision clearing the transaction – the transaction is authorised to proceed because it does not give rise to a SIEC;
• a decision of clearance subject to commitments – where a transaction raises serious concerns, it may nevertheless be cleared subject to conditions; eg, that the parties must divest certain businesses within a certain period following completion or must give commitments regarding their future behaviour; and
• a decision to launch a Phase II investigation – the transaction raises serious doubts regarding the creation of a SIEC such that a more detailed investigation is required.

The PCA is not authorised to block a merger in Phase I (except for the merger in the Ongoing/Prisa/Media Capital case, which, as mentioned in 1.3 Enforcement Authorities, was blocked in Phase I following the binding negative opinion of the media regulator). The PCA will initiate a Phase II investigation where the evidence collected and analysed raises serious doubts that the concentration leads to a SIEC. Phase II proceedings involve a detailed, in-depth investigation that places a significant burden on the parties, the PCA and interested third parties involved in the process.

Phase II

Phase II investigations must conclude within a maximum time limit of 90 working days from the notification's effective date. The 90-working-day period already comprises the initial 30 working days used by the PCA for Phase I investigations. The timetable is as follows: 30 working days for Phase I and 60 working days for Phase II, totalling 90 working days. Following a Phase II investigation, the PCA will clear the transaction (often subject to commitments) or prohibit it (unless the parties have already abandoned the deal).

Both the 30- and 60-working-day deadlines may be suspended in the following four cases:

• by up to 20 working days in complex cases at the request of the parties or by the PCA with the consent of the parties;
• by 20 working days when the parties offer commitments – the suspension ceases when the PCA informs the notifying parties that the commitments were accepted or rejected;
• when the parties have not supplied information required by the PCA – in these cases, the PCA will typically "stop the clock" until the missing information is provided, and the clock will resume on the day following the receipt by the PCA of the requested information (it is not uncommon for the PCA to send information requests to the parties); and
• in the case of a prior hearing of the notifying parties or interested third parties having submitted observations.

If no decision is adopted within the time limits, a non-opposition decision is deemed to have been adopted (tacit clearance).

Parties are encouraged to engage in pre-notification discussions with the PCA. The pre-notification guidelines recommend that interested parties contact the PCA at least 15 working days before notification by sending a memorandum describing the essential elements of the transaction and a draft notification form. Pre-notification consultations are customary.

The PCA's pre-notification guidelines state categorically (in paragraphs 6 and 10) that all confidential information exchanged by the notifying parties with the PCA during the pre-notification phase shall be treated as such. Moreover, the PCA's statutes determine that PCA officials are bound to obligations of professional secrecy and subject to the general provisions of the Criminal Code on breach of secrecy by public servants.

The PCA is allowed to, and very often does, request the notifying parties to provide additional information that it considers necessary for its analysis. Requests for additional information in both phases of the procedure stop the clock. The clock resumes on the day after receipt of the PCA's requested information.

In more straightforward cases where the additional information the PCA seeks is of a simple nature and can be readily obtained from the parties via informal contacts (eg, email), the PCA may not (and often does not) stop the clock.

As mentioned in 3.5 Information Included in a Filing, as a general principle, concentrations that do not raise competition concerns may be notified according to the simplified form. This form can be used when the following conditions are met:

• there are no horizontal or vertical overlaps and no conglomerate relationships between the parties;
• the combined market share of all parties to the concentration that are engaged in business activities in the same product and geographical market (horizontal relationships) does not exceed 20% or 25% where the share increase is not higher than 2%;
• none of the individual or combined market shares of all the parties to the concentration that are engaged in business activities in a product market that is upstream or downstream of a product market in which any other party to the concentration is engaged (vertical relationships) exceed 25%; and
• none of the individual or combined market shares of all the parties to the concentration engaged in business activities in neighbouring markets (conglomerate relationships) exceed 25%.

The PCA may clear cases filed under the simplified form (and other straightforward cases) before the Phase I deadline expires. Although the PCA does not commit to specific reduced timeframes, cases under the simplified procedure have often been decided in about 20 working days.

The substantive test employed by the PCA is a significant impediment to effective competition (SIEC). Mergers are cleared if they do not create a SIEC in the national market or a substantial part of it.

Unlike Commission Regulation (EC) No 802/2004, Regulation 993/2021 does not define affected markets as such. However, for the purposes of the information required by the notification forms attached to Regulation 993/2021, affected markets may be interpreted as consisting of all plausible relevant product and geographic markets, on the basis of which the concerned parties have a relevant overlap in the Portuguese territory.

Regulation 993/2021 may require the concerned parties to file a regular or simplified notification form depending on the nature and intensity of this overlap (or even the absence of one). Market shares below the thresholds accepted under the simplified form (see 3.11 Accelerated Procedure) are usually deemed de minimis to assess the overlap between the parties' activities. In these cases, competitive concerns are usually considered unlikely.

The PCA's Guidelines for the economic appraisal of horizontal mergers generally do not set a de minimis threshold. However, in its decisional practice, the PCA follows the general guidance issued by the European Commission, including the Guidelines on assessing horizontal mergers and the Guidelines on the assessment of horizontal and non-horizontal mergers.

The PCA's decisional practice, including on market definition, generally follows its case law, the case law of the European courts, and the European Commission's decisional practice. Other jurisdictions may be an important source of information where there is an absence of recent and relevant precedents by the EU and the PCA (particularly case law from close jurisdictions and well-established and reputed competition authorities).

The PCA reviews a proposed transaction's horizontal, vertical and/or conglomerate aspects and will investigate whether the transaction gives rise to coordinated and/or non-coordinated effects. In its assessment, the PCA typically considers the structure of the relevant markets; the positions of the parties and their competitors in the relevant market; the market power of the acquirer; potential competition and barriers to entry. The PCA also considers any efficiency claims identified by the parties.

According to the Competition Act, in its substantive assessment, the PCA must consider the evolution of economic and technical progress that does not constitute an impediment to competition, "provided there are efficiency gains that benefit consumers resulting directly from the concentration". This provision (Article 41(2)(k)) is interpreted as the legal basis for allowing for the consideration of efficiency claims.

There are two situations where non-competition issues may be taken into account in the substantive assessment of a merger:

• a prohibition decision adopted by the PCA can be reversed by a decision of the Council of Ministers when “strategic fundamental interests of the national economy” are at stake (see Article 41 of the PCA’s statutes); and
• mergers in the media sector where the media regulator issues a negative binding opinion.

In the latter case, the PCA is forced to adopt a prohibition decision, not on competition grounds, but due to the binding opinion of the media regulator (see Law 78/2015 of 29 July 2015). In case 41/2009, Ongoing/Prisa/Media Capital, the PCA prohibited the merger following the negative binding opinion of the regulator, even though, according to statements made by commentators, it raised no competition concerns.

Regarding FDI, see 9. Foreign Direct Investment/Subsidies Review.

As mentioned in 2.10 Joint Ventures, full-function joint ventures are subject to merger control and assessed according to the same substantive criteria applicable to other types of concentrations. Non-full-function joint ventures may still be subject to the Competition Act and assessed as restrictive practices if they have (as their object or effect) the coordination of the competitive behaviour of independent undertakings.

The PCA can block a transaction if, following the substantive assessment, it concludes that the operation is liable to give rise to a SIEC in the relevant markets, the existence of which must be shown. The PCA can also "interfere" with a transaction, forcing the notifying parties to shape it into a different configuration. As noted in 3.8 Review Process, where a transaction raises serious concerns, it may be cleared subject to conditions.

The notifying parties may, at any time in Phase I or II, on their own initiative or after an informal invitation from the PCA, submit commitments to ensure the clearance of the transaction.

There is no legal standard as such. However, according to the PCA’s 2011 Remedies Guidelines, remedies should be capable of addressing all competition concerns raised by the concentration and be “interpreted in light of the underlying objective of creating conditions for an effective competition in the market or of maintaining an effective competition in the relevant market” (paragraph 14). Therefore, remedies should include an assessment of the adequacy, sufficiency, and viability of the commitments.

Commitments may be of a structural or behavioural nature. According to the PCA's guidelines on remedies, structural remedies involving the divestiture of a viable and competitive business are preferred over behavioural remedies (see, eg, cases 2016/37, SIBS/Unicre and 2017/35, Altice/Media capital where the PCA rejected behavioural remedies). In certain cases, both types of commitments have already been accepted by the PCA simultaneously.

Despite the stated preference for structural remedies, the PCA's decisional practice shows that behavioural remedies are often used. Remedies are not sought to address non-competition issues.

As noted in 5.2 Parties' Ability to Negotiate Remedies, notifying parties may submit commitments in both phases of the procedure and prior to submitting the notification (within pre-notification discussions). Although the Competition Act sets no specific timeframe for commitments to be offered, the PCA recommends that, in Phase I, parties submit commitments within 20 working days from notification and, in Phase II, within 40 working days following the decision to open an in-depth investigation.

The parties submit remedies and then informally, negotiate with the PCA. The PCA does not have the prerogative to impose remedies not formally proposed by the notifying parties (ie, remedies are always proposed by the notifying parties). The PCA will refuse the commitments when it considers that they have been submitted as part of a dilatory tactic or that the commitments are insufficient or inadequate to remedy competition concerns.

An administrative complaint may be lodged against the refusal decision, but no court appeal is allowed. If the PCA is convinced of the proposal's merits, the remedies are formally submitted as a "commitment", and the clearance decision is subject to conditions and obligations intended to ensure compliance with the commitment.

Guidelines on Remedies

The guidelines on remedies set out the procedural rules for the proposal, negotiation and implementation of remedies. The notifying parties must submit a formal commitment, accompanied by a completed form (attached as an annex to the remedies guidelines), describing the commitment, explaining its suitability to remove the competition concern, identifying any deviations from the PCA's model texts and providing detailed information on the divestiture business/behavioural commitment offered. The normal practice is to submit a draft of the commitment and completed form to the case team for review and comment.

There is no legal timeframe for commitments to be offered, but the PCA recommends that during Phase I, the parties submit commitments within 20 working days of the original notification and, in Phase II, within 40 working days of the decision being taken to open an in-depth investigation. The parties may also submit commitments during pre-notification discussions before formally initiating the review procedure.

The case team may then come back with questions that need to be answered before the "green light" is given to submit the final formal commitment. After receiving the formal commitment, the PCA may "market test" it with other market players before accepting it.

As a general rule, transactions approved by the PCA subject to commitments can be implemented before the conditions and obligations attached to them have been fully complied with. In fact, the implementation of both structural and behavioural commitments may take several years following the clearance decision. Non-compliance with the remedies will expose parties to the following negative consequences:

• nullity of all legal acts and agreements related to the merger contravening the PCA’s decision on the commitments and possible revocation of the clearance decision; and
• the application of fines up to 10% of the previous year's turnover for each undertaking being a part of the infringement.

The procedural rules for enforcement against anti-competitive practices apply to the PCA's investigation, meaning the PCA enjoys broad investigative powers.

Decisions are always notified to the notifying parties, regardless of whether the decision in question is a clearance (conditional or unconditional) or a prohibition decision. The PCA publishes Phase I and Phase II decisions in non-confidential versions on its website. The PCA also publishes a press release on its website when it adopts a final Phase I or Phase II decision and generally also when it decides to open a Phase II investigation.

To date, there have been only seven formal prohibition decisions in Portugal:

• Arriva/Barraqueiro (Case 37/2004, 25 November 2005);
• Petrogal/Esso (Case 45/2004, 14 December 2005);
• Brisa/AEO/AEE (Case 22/2005, 7 April 2006);
• TAP/SPDH (Case 12/2009, 19 November 2009);
• Ongoing/Prisa/Media Capital (Case 41/2009, 30 March 2010); 
• Controlinveste/ZON Optimus/PT (Case 4/2013, 31 July 2014); and
• RBI/Grupo Fundão (Case 51/2019, 6 October 2020).

This statistic may be misleading, as challenged transactions are sometimes abandoned by the notifying parties (since 2003, the year the PCA was created, 11 transactions have been abandoned; more recently, between 2017 and April 2021, four mergers were abandoned following an investigation by the PCA: Ccent. 37/2016, SIBS/Ativos Unicre; Ccent 35/2017, Altice/Media Capital, Ccent 9/2019, Fidelidade SGOII/Saudeinveste*IMOFID and Ccent/2020/48 - FCC/AQUAPOR). The imposition of remedies in more complex transactions is common.

Two cases may be mentioned where remedies were applied in foreign-to-foreign mergers: the Dreger/Hillenbrand merger (case 44/2003) and the SC Johnson/Sara Lee’s Insecticide Business merger (case 25/2010).

Restrictions that are directly related and necessary to the implementation of a transaction (such as non-compete obligations between the seller and the acquirer or between the joint venture and the parent companies, or transitional supply, distribution or licensing agreements) are covered by the Commission decision approving a transaction, without the need for a separate notification (it is not possible to file a separate notification form for ancillary restraints).

Within five working days of the date on which the notification becomes effective, the PCA publishes a summary of the notification with a description of the key elements of the concentration in two national daily newspapers (at the expense of the notifying parties) and on its website and sets a time limit of no less than ten working days for interested third parties (whose rights or legitimate interests may be affected by the transaction) to submit written observations. Interested parties that submit comments expressing concern regarding the transaction are considered opposing parties and are allowed to intervene in the procedure at different stages:

• at the prior hearing (the execution of which has the effect of stopping the clock for the adoption of the final decision); and
• prior to adopting any decisions (non-opposition or prohibition decisions).

Opposing parties may also access a non-confidential version of the PCA's file in both Phases I and II and appeal the PCA's final decision.

Although interested third parties are allowed to intervene in the review process to safeguard their legitimate rights, the PCA does not directly contact them (however, the PCA may contact other companies as part of the review process where it deems it useful or necessary to do so). Instead, the procedure is made public and interested parties are invited to intervene (see 7.1 Third-Party Rights).

Regarding remedies, after receiving the formal commitments from the notifying parties, the PCA "market tests" them with other market players before accepting them.

Notifying parties are requested to identify, both in the notification and in responses to additional requests for information, all information (eg, commercially sensitive information and business secrets) that they believe should be kept confidential and submit a non-confidential version of these documents. Failure to do so might lead the PCA to declare the notification incomplete. If the PCA accepts the confidentiality claims, the information will not be disclosed to third parties.

Following a consultation with the notifying parties, a non-confidential version of the final decision is published on the PCA’s website.

The PCA’s statutes determine, in general, that PCA officials are bound to obligations of professional secrecy and subject to the provisions of the Criminal Code on breach of secrecy by public servants.

At the EU level, the PCA cooperates closely with the European Commission under the EU Merger Regulation and with EU member states' national competition authorities (NCAs), particularly the Spanish Competition Authority. The PCA is a member of the European Competition Network (ECN), a forum for cooperation to ensure the consistent application of competition law among its members. Within the ECN, the EU Merger Working Group is responsible for merger control-related issues.

International Competition Network

The PCA is also part of the International Competition Network (ICN) - with a focus on policy matters - and the network of the European Competition Authorities (ECA), a forum for discussion of all competition law-related matters between the NCAs within the EEA as well as the European Commission and the European Free Trade Association (EFTA) supervisory authority. This discussion includes the exchange of information on all merger cases that are notifiable in more than one ECA country. The PCA is a founding member of the Ibero-American Forum on the Protection of Competition and the network for competition authorities of Portuguese-speaking countries.

The PCA has also concluded a working agreement with Brazilian competition authorities.

Contracting NCAs

The PCA contacts other NCAs through these institutional networks on a need basis. This contact may concern cooperation on general policy matters regarding merger control but may also include possible information exchanges in the context of specific transactions. As a general principle, the parties' prior consent is not required.

However, the PCA must not exchange confidential information relating to the parties with other NCAs unless the parties have given their express consent. The information exchanged can only be used for the purposes it has been collected, and the other NCAs are obliged to keep the information confidential.

All merger control decisions are appealable to the Competition, Supervision and Regulation Court. Under the Competition Act (Article 87(1)) and the Code of Procedure in the Administrative Courts (Article 144(1)), appeals must be lodged within 30 days of notification of the final decision by the PCA (unless the decision is null and void, in which case there is no time limit). The appeal does not have a suspensive effect.

Rulings of the Competition, Supervision and Regulation Court can be appealed to the competent Appeals Court (Tribunal da Relação) within 30 days of the ruling. Appeals against rulings of the Appeals Court, in cases of decisions other than the application of fines, are lodged with the Supreme Court (Supremo Tribunal de Justiça) and are limited to points of law.

Appeals exclusively concerning points of law are lodged directly with the Supreme Court.

Appeals to Date

To date, there have only been four appeals based on final decisions on merger control: the appeal of the prohibition decision adopted in the Arriva/Barraqueiro case (case 37/2004, the final court ruling was issued in November 2016), the appeal of the clearance decision adopted in the Arena Atlântida/Pavilhão Atlântico case (case 38/2012), the appeal of the clearance decision in the SUMA/EGF case (case 37/2014), and the appeal of the clearance decision in the MidSid/Ativos da 3D case (case 26/2017). Except for the appeal in the latter case, the remaining were all unsuccessful.

See 8.1 Access to Appeal and Judicial Review. The timeline will vary depending on several factors, such as the procedural complexity of the case and the court's workload, although it is not expected for an appeal to be heard earlier than three months following its filing.

All the PCA’s final decisions on merger control, including decisions clearing a concentration, are subject to judicial review and may also be appealed by interested third parties. Clearance decisions have been appealed (eg, SUMA/EGF and MidSid/Ativos da 3D case).

See above 1.2 Legislation Relating to Particular Sectors. The Portuguese FDI Law (Decree-Law 138/2014) does not require mandatory notification of any transaction, but the prospective purchaser may voluntarily request an ex-ante confirmation that an opposition decision will not be issued.

The Portuguese merger control regime was subject to significant reform in 2012, with the approval of Law 19/2012 of May 2012 (the new Competition Act).

On 17 August 2022, following a failed transposition attempt due to the elections for the Portuguese Parliament, Law 17/2012, transposing EU Directive 2019/1 of the European Parliament and of the Council of 11 December 2018 (ECN+ Directive), was approved by the new Parliament. The Directive empowers the member states' competition authorities to be more effective enforcers and to ensure the proper functioning of the internal market. The provided changes do not, however, include any significant amendments to the merger control rules (the only relevant change being the establishment of an obligation of the PCA to ask the competent regulatory authorities for an opinion in merger cases concerning markets subject to sectorial regulation).

The statutes of the PCA have also been reviewed to ensure compliance with the recent framework law on regulatory authorities and to introduce relevant changes to the regime of the extraordinary appeal of a concentration to the minister of economy.

Fines for failure to notify, although not frequently imposed, have risen in number in the last few years. Seven instances of those fines exist, as per 2.2 Failure to Notify.

Concerning the blocking of transactions, see 5.8 Prohibitions and Remedies for Foreign-to-Foreign Transactions. The imposition of both behavioural and structural remedies is a frequent practice. In 2019, the PCA issued decisions on 59 merger cases, two of which were in Phase II.

In October 2020, the PCA issued a prohibition decision in the case of RBI/Grupo Fundão, following a Phase II investigation, where it found that the merger would eliminate competition in passenger transport services in central Portugal.

In late December of the same year, in the case of Pigments Spain/Ativos Ferro, the PCA decided, following a Phase II investigation, to clear the proposed acquisition of Ferro Corporation (Ferro), subject to commitments by the acquiring undertaking, Pigments Spain (the divestment of all the target's assets and businesses in Portugal).

In 2021, the PCA applied fines that amounted to a total of EUR395,00 in 3 gun-jumping cases and, more recently, in 2022, applied a record-breaking fine for failure to notify in the amount of EUR2,500,000.

On 29 December 2022, the PCA published its general policy priorities for 2023. Regarding merger control, the document is rather succinct, merely informing that the PCA will continue to investigate mergers implemented before approval by the PCA (gun-jumping) and to ensure a swift, accurate and effective merger analysis.